The Environmental Protection Agency (EPA) determined that carbon dioxide, and five other greenhouse gases spewing out of tailpipes, "endanger public health and welfare" of the American people. These gases, they said, contribute to climate change, which is causing more heat waves, droughts and flooding, and is threatening food and water supplies.

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The EPA's mandate is a critical step toward amending climate change regulations. It gives President Obama the ammunition, under the 40-year-old Clean Air Act, to order emissions reductions and tighten regulations. That could include measures such as requiring more fuel-efficiency in cars and less carbon dioxide emission at plants and industries.

"It's a serious problem for us and for the world," EPA Administrator Lisa Jackson recently told ABC News. "And the impacts of climate change are not just life and death, but they are economic costs that are hard to extrapolate into the future."

Industry insiders say the EPA's decision also is important because it sends a signal to the world that the United States is going to be a partner in solving the problem.

"The EPA's action is the first major step that our government has taken towards regulating global pollution," said Joe Mendelson, director for global warming policy at the National Wildlife Federation. "It is a game changer ... the most significant step that our government has ever taken to deal with the climate change crisis."

Proponents of stricter standards hailed the EPA's decision.

"This is a momentous day, a great moment," said David Doniger, climate policy director for the Natural Resources Defense Council. "We've been trying for more than 10 years to get the government to make the simple statement that this global warming pollution is dangerous. And for the last eight years, it was too hard for the last administration to utter those words.

"Less than 90 days into the new administration, President Obama and his team are moving in global warming in a real way," Doninger added.

But it is also already causing an uproar in the business community. Critics say the administration's actions could cost jobs -- as many as two million -- and drive up energy prices. There also is concern that it will lead to government regulation of office buildings, planes, ships, farms, even cows, which are big methane gas producers.

"If they decide to ... regulate under the Clean Air Act, that literally puts EPA in charge of entire economy," said Bill Kovacs, vice president for the Environment, Technology and Regulatory Affairs Division at the U.S. Chamber of Commerce.

"It would be a disaster," he added. "They're trying to pressure Congress and the business community to do something that they would really rather not do, because they also know that there is a risk that this regulatory cascade will actually go into effect."

Pressure on Congress

Despite the landmark decision, it remains unclear how the EPA will use its authority to regulate greenhouse gas emissions.

Jackson has indicated the agency could implement new guidelines under the Clean Air Act, but the Obama administration would rather have Congress pass comprehensive energy and climate legislation, including a "cap-and-trade" program to reduce carbon emissions.

"The way to really tackle the problem is through legislation," Jackson said. "And we're hopeful that ... legislation will include 'cap-and-trade' and literally create, change the landscape of our energy economy."

The country may not yet see any direct action on environment laws, but today's EPA ruling gives President Obama the "climate stick" to use in an effort to get what he wants in an energy and climate bill from Congress.

"I think what he is saying to Congress is, 'Better for you to do it in a comprehensive way, but I've got the authority to move us down that path if you can't do it,'" said John Podesta, president and chief executive of the Center for American Progress. "I don't think it's a threat. I think it's a commitment to change the way the country produces and uses energy."

Some lawmakers have already expressed their support for the ruling. Rep. Henry Waxman, D-Calif., and Sen. Barbara Boxer, D-Calif., both issued statements commending the EPA's "endangerment findings." In concurrence with Obama, both Californians stressed that they favor using a more flexible legislative approach -- rather than EPA regulation -- to combat greenhouse gas emissions.

Obama's Environmental Policy

President Obama affirmed his commitment in a speech in Mexico City, where the president met with President Calderon and other leaders to discuss trade and the economy.

"Together, we're establishing a new bilateral framework on clean energy and climate change that will focus on creating green jobs, promoting renewable energy, and enhancing energy efficiency," he said at a press conference on Thursday.

The framework will establish a mechanism for "political and technical cooperation and information exchange" to spur shared efforts between the two countries in developing clean energy economics.

In March, the president said $59 billion in the Recovery Act and in tax incentives will go toward promoting clean energy. He announced $1.2 billion investment for research though the Department of Energy national labs.

"We know that enhancing America's competitiveness will require reducing our dependence on foreign oil and building a clean-energy economy," he said at a town hall meeting in California last month. "[The budget] makes clean energy the profitable kind of energy and invests in technologies like wind power and solar power, and fuel-efficient cars and trucks, and high-speed rail -- powered by batteries like the one I saw in Pomona earlier today -- all of which will help us combat climate change. That's got to be a priority."

Obama also can count on help from political allies in his environmental push. Former vice president Al Gore's group, the Alliance for Climate Protection, plans to launch a national campaign to get a climate change bill passed this year. The high-profile and well-funded campaign is expected to grab the attention of lawmakers, but question remains on what the administration's next steps will be.

For the time being, environmental activists are popping open champagne bottles and rejoicing in their victory, which they say comes after eight years of stagnation.

"For the last several years, we've been on the sidelines not playing," Mendelson said. "It's sort of a proud moment -- almost a being-a-papa moment."